Harvest of Profits - Facultypages.morris.umn.edu

 Largest privately owned U.S. corporation
 Over a century old
 “Few facets of modern life ar unaffected or unreached
by Cargill today”
 Trades world-wide commodities, operates
manufacturing plants that process everything from seed
grains to soybeans to salt.
 Cargill’s annual sales worldwide in 1979 was $12.6
Cargill’s Corporate Origins
 In 1865, Will Cargill bought into grain elevators in Iowa
 Soon joined by 2 of this brothers in the business
 By 1980, the Cargill’s controlled most grain posts along
major railways in North Dakota, South Dakota, Iowa,
Minnesota, and Wisconsin
 Expansion continued with grain terminals on Great Lake
 Soon profits allowed the Cargill’s to venture into areas
outside of grain
 The Cargill empire was almost lost
 In 1895, John H. MacMillan married into the Cargill family
and became the saving grace of the business
Expansion at Home and Abroad
 Cargill launched direct sales offices in the East
 The Cargill’s now handled grain from the local elevators to
the final market in the East
 1932, took over grain export elevator in Albany, NY
 Cargill’s took over the Chicago market to become the
largest grain trader in the area
 WWII ended direct private grain exports
 Cargill benefited from the war by diversifying operations
 After the war created an oasis of opportunity for Cargill as
the U.S. became the world’s main food supplier while
countries rebuilt themselves
 Ag exports in the U.S., mainly wheat and flour, rocketed from
48 million bushels in 1944 to 503 million in 1948!
Government Support: Public Law
 In 1954, the U.S. government created “Public Law 480”
 "lay the basis for a permanent expansion of our exports of
agricultural products with lasting benefits to ourselves and peoples
of other lands.“ quote from President Eisenhower (Wikipedia)
 Serve 2 purposes for Cargill, Inc.:
1)allowed for an increase in exports
2)allowed for Cargill (and others) to enter into foreign markets and then
helped to increase ease of direct commercial sales in those markets
 Other government programs that increased exports:
 Commodity Credit Corporation (CCC)
 Barter Program
 70% of grain exports from the U.S. were government financed in
some years!
Cargill’s Domestic Structure
 Domestically the corporation operates at 3 main hubs
of the grain collection and distribution
 1) local elevators
 2) sub-terminals and terminals
 3)export elevators located at major U.S. ports
 In the 1950’s and 60’s the U.S. government, through
the CCC, bought up excess grain to help keep prices
from falling
 Cargill stored much of the excess grains in their own
facilities, allowing them to get paid over $76 million
from the government
Cargill’s Domestic Structure Cont.
 The transportation sector was a huge part of Cargill’s
market takeover.
 In the 1940’s Cargill dominated the river transportation
system with the widening of the Minnesota River
channel and the additional use of barges and tow boats
 In the 1960’s Cargill convinced the Interstate Commerce
Commission to restructure railway rates and regulations
Cargill also helped to establish “Rent-A-Train”
 This put even more limitations on the options available to
small farmers in grain sales
Financing the Cargill Empire
 It is incredibly expensive to cover the costs of carrying grain
from local elevators to the final market
 Even Cargill does not have the finances to do it
 Cargill relies on banks and financial institutions, along with
networking advantages
Chase Manhattan Bank: John Peterson left to become Cargill’s chief
financial officer
First National Bank of Minneapolis: President George H. Dixon also
serves as a director of the Cargill Foundation
Insurance companies: short-term loans to build grain elevators,
storage bin, or the like
Public financing: port authorities
 1973 = net assets of $352 million yet engaged an amount of
trade worth $5.3 billion!
Foreign Marketing Activities:
“The Sun Never Sets on Cargill’s Corn”
 Cargill operates in 36 countries with 140 affiliates and
 Not only exports large amounts of U.S. grain but also
buy and export grains from other nations such as:
 Argentina, France, Canada, Philippines, Japan, and West
 In Europe, Cargill also run large shipping and
transportation networks, own manufacturing
subsidiaries, and have connections with large banks
A Multinational Industrial
 Cargill has become a major player in Western Europe’s
vegetable oil and animal feed industries
 Took over a Canadian firm and expanded to feed mills
and poultry breeding stock
 Cargill has broadened feed and food processing
facilities into a number of third world markets as well
 Started working in South Korea to build an integrated
poultry operation
 South Korean government put restrictions on foreign
exchange of Korean Cargill
Cargill and the State
 Cargill has worked closely with many leading politicians,
especially those of the Democratic Farmer Labor party in
 Senator Hubert Humphrey:
has been given money from Cargill, “for every campaign since he ran for
mayor of Minneapolis.”
 Vice-President Walter Mondale:
played a major part in U.S. deciding to buy grain company contracts
with Soviet Union in 1980
 U.S. President Richard Nixon
 Cargill officials: William Pearce
 helped to establish the blueprint of the U.S. agriculture in the 1970’s
through the Williams Commission report
 The Department of Agriculture has departments that are also
highly influenced by members of the Cargill corporation
Profiteering and the Future of the
Grain Trade
 Cargill’s records for 1973 state that net assets increased
from $246 million to $352 million
 Profits alone were $107.8 million
 Cargill is the largest private grain exported in 4 of the
world’s 5 leading export nations
 Cargill is expanding current U.S. agriculture market
share, as well as diversifying to regions outside of the
agriculture sector to protect itself
 “Exploiting people’s most fundamental needs and
making enormous profits in the process, firms like
Cargill vividly illustrate the basic injustices of
capitalism. . . . To protect itself, Cargill will strive to
maintain the veil of secrecy and attempt to use friendly
politicians and bureaucrats as a protective shield. But
in the long run its insatiable quest for profits and
markets can only increase the discontent felt by
working people in the U.S. and abroad”

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